Costs Associated With Propane Vehicle 

Fueling Infrastructure

Factors to consider in the implementation of fueling stations and equipment

Margaret Smith, New West Technologies (DOE HQ Technical Support)

John Gonzales, National Renewable Energy Laboratory

This document has been peer reviewed by the propane industry.

August 2014
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Introduction

This document is designed to help fleets understand the cost factors associated with propane 

vehicle fueling infrastructure. It provides an overview of the equipment and processes necessary 

to develop a propane fueling station and offers estimated cost ranges. The information presented 

is based on input from propane industry professionals who design, sell equipment for, or own 

propane stations.

The costs associated with developing and operating a propane fueling station vary substantially 

according to the fuel storage capacity, the size of the fleet, and the market it serves (retail station 

setups have substantially greater capacities than basic fleet setups). We provide cost 

approximations across a range of storage capacity and fuel use scenarios. The total cost of 

developing a propane station depends on a number of factors, and costs can vary widely from 

one project to another, based on the specific needs of the fleet and other users, the complexity of 

equipment installation, and the permitting processes. This document outlines such factors for 

fleets’ consideration but is not intended to be a tool for estimating the cost of an individual 

project. To obtain an estimate for a specific project, contact a propane provider or a registered 

professional engineer affiliated with the National Propane Gas Association or one of its state 

propane gas association partners.

Propane Station Overview

Across the United States, more than 2,000 public and private fueling stations offer propane (also 

known as liquefied petroleum gas

or autogas). Propane is delivered

to a station by a transport truck 

and stored in tanks, typically

located above ground. Propane 

fueling dispensers are similar to 

gasoline dispensers, and they can 

be located near each other at 

fueling stations.

Skid-mounted propane stations, 

which are at the lower end of the 

cost range, are compact.

Installations require little labor or 

construction. Typical skidmounted units have a 1,000- or 

2,000-gallon storage tank.

Sometimes two 1,000-gallon 

tanks are more cost effective than 

a 2,000-gallon tank. These tanks 

are commonly filled one to five 

times per week, depending on the fleet’s needs.

Skid-mounted 1,000-gallon propane storage tank and dispenser. Photo 

from Blossman Gas, Inc., NREL 30340
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Owners of larger stations often choose storage tanks with sufficient capacity to accept a full 

transport load (a full truck from the supplier) in order to receive fuel pricing benefits. The 

transport load size is typically 

9,000 to 12,000 gallons. These 

storage tanks are filled as 

needed, depending on the tank 

size and the fleet’s or customers’

needs.

Many propane suppliers offer a 

cost-effective lease of the tank, 

pump, and dispensing equipment 

in return for a fuel supply 

contract. In these cases, the 

station owner is responsible for 

the costs of infrastructure (such 

as the concrete pad, vehicle 

crash protection, electricity line, and connection to the fuel management system) that cannot be 

removed from the site when the fuel contract has expired. Equipment and installation costs are 

amortized in the fuel supply contract.

Factors Impacting Propane Station Costs

The most significant costs associated with developing a station are those related to equipment, 

station design, and installation. Approximated cost ranges are provided below, but actual costs of 

a given project will vary according to the specific needs and constraints of the station and its 

users.

Propane Station Equipment

Station equipment costs will vary based on equipment size, specifications, and manufacturer.

Storage Tank and Filling ($5,000 to $100,000)

• Propane is delivered to the site by a bulk truck and stored in an onsite tank. A fleet should 

select a storage tank size based on the fleet’s fuel use and the frequency of fills.

• Used propane tanks may be available for purchase and could cost less than new tanks.

• The fleet manager and the fuel supplier work together to determine the communication 

procedure for filling a propane storage tank. Options include:

o A fleet manager has the tank filled at a specified frequency, such as once per

week. 

o The tank is monitored with a sensor that notifies the supplier when filling is 

necessary.

o A fleet manager tracks the fuel use and submits tank fill requests based on fleet 

needs and fuel pricing. In this case, the fleet manager should ensure the tank does 

not completely empty between fills, as this may damage equipment and prevent 

the tank from being able to fuel vehicles.

Austin-Bergstrom International Airport self-service propane station with 

twin 18,000-gallon tanks. Photo from CleanFUEL USA, NREL 28220
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Dispenser ($5,000 to $35,000)

• The dispenser manages the propane that is 

delivered into the vehicle. It can vary in 

complexity and cost depending on the 

enclosure material, fueling flow rate, number 

of hoses, electrical system, size of pump 

motor, and fuel management system.

• Additional dispenser hoses reduce wait times

by allowing more vehicles to fuel 

simultaneously. Depending on the station 

design and the dispensing rate, adding more 

dispensers may require purchasing a larger 

pump and motor.

Pump and Motor ($4,000 to $15,000)

• The motor is connected to the electrical 

setup and powers the pump. The pump 

pushes propane from the storage tank and to 

the dispenser, which delivers it to the vehicle

via the hose.

• Propane generators can be used to run the 

motor during a power outage and are assets

in an emergency preparedness plan. Propane 

generator costs can range from $3,000 to 

$10,000, depending on the pump and motor size.

Fuel Management System ($5,000 to $30,000)

• The fuel management system monitors and tracks the flow of fuel delivered to the 

vehicle. It can vary in complexity from a simple card reader to a full-service tracking 

system of driver and vehicle fueling history.

Design and Installation

Installation and Site Preparation

Propane station development typically involves installation costs, such as those associated with

crash protection, plumbing, electrical connection, concrete foundation, and material shipping.

Many factors affect site preparation costs, including:

• Site layout, such as distance to buildings, property lines, and sources of ignition

• Distance from propane tank to dispenser

• Availability of electrical power

• Running a water line for a sprinkler or water monitor deluge system

Propane dispenser and 2,000-gallon tank. Photo 

from CleanFUEL USA, NREL 28219
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• Signage, lighting, and security fencing, as needed

• Availability of other types of fuels to be dispensed at the same location

• Site preparation, as necessary

• Physical dimensions of the vehicles the station will serve.

Regulatory and Permitting Issues

Regulatory and permitting issues can contribute to the cost of the station or even make the station 

cost prohibitive. Engaging the authority having jurisdiction (typically a fire marshal) at the 

project outset will simplify the permitting process. It will also ensure compliance with relevant 

National Fire Protection Association codes. Permitting may be easier for smaller, skid-mounted 

systems. Americans with Disabilities Act compliance may also affect the cost of the station or 

other facility design parameters.

Planning for Growth

Some fleet managers initially lease a smaller tank when transitioning to propane. As propane use 

increases, they may lease or purchase equipment for larger station throughput. Skid-mounted 

systems are convenient for growing fleets because they can be easily replaced with larger 

systems.

Propane Lawn Equipment

Many landscape companies, parks, and other 

organizations with turf management operations are 

powering their mowing equipment with propane. 

Typically, empty propane cylinders are removed 

from the lawn equipment and stored in a cage 

onsite. A propane provider fills the cylinders in the 

cage or replaces empty cylinders with full ones

each week. Less commonly, the fleet installs a 

small propane station with a 500-gallon tank to fill 

cylinders.

Mobile Onsite Fueling 

Mobile onsite fueling, also known as wet hosing, is 

an option for propane fueling. Vehicles return to the 

fleet facility in the evening, and a propane supplier 

fuels the vehicles while they are not on duty. A fleet may choose this option instead of building 

onsite infrastructure for cost or convenience benefits. Fleets also use it as a temporary fueling 

arrangement if propane vehicles arrive before infrastructure is operational or if infrastructure is 

out of service. Some propane suppliers prefer to use wet hosing under emergency circumstances

only. A fleet should consult local code authorities to identify any restrictions to mobile fueling. 

Pump Redundancy

Incorporating pump redundancy (a backup system) in the station design will allow the station to 

continue operating if a pump stops functioning. The additional equipment will increase station 

cost but improve reliability.

A National Park Service employee operates a 

propane-powered mower at the National Mall 

in Washington, D.C. Photo from Julie Sutor, 

NREL 26748.
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Geographic Location and Weather

Geographic location and weather impact the costs of equipment, installation, and permitting. In 

extreme cold climates, more elaborate equipment may be needed, including additional heaters.

Regions prone to earthquakes may have seismic design requirements. Inclement weather during 

construction can add to installation costs. For example, a project may incur expenses related to 

keeping water out of trenches. Equipment and construction costs vary from one region to the 

next. 

Offsite Fueling Network

In some areas of the country, a network of offsite fueling facilities may be available to serve a 

fleet’s needs. These facilities are accessed by members of a private network through a 

certification card and may not have fueling attendants present. This system allows multiple 

propane vehicle fleets in a particular geographic area to use the same infrastructure.

Cost Estimates

The tables below provide cost estimates for propane fueling stations of various sizes. In the 

“Cost Range” column, two estimates are included for each scenario: the first includes the costs of 

purchasing new equipment and installation at a typical site; the second includes the initial costs a 

fleet manager will incur if he or she enters into a leasing agreement with a fuel provider. 

Notably, the scenarios below may differ significantly from the actual operations of a particular 

fleet. This is important, given that the frequency with which a station’s storage tank is filled 

depends on the tank’s capacity and the specific fueling demand of the fleet in question. As 

mentioned, the costs of a given project will vary according to the specific needs and constraints 

of the station and its users.

Small Stations (Skid-Mounted)

Station Design Approx. Daily 

Fuel Use*

Cost Range Example Applications*

1,000-gal 

storage tank

1 single-hose 

dispenser

100–400 gal

(If tank is filled 

every 2 weeks to 

2 times/wk)

Purchasing New 

Equipment: 

$45,000–$60,000

Initial Cost for Leasing:

$3,000–$10,000

3 school buses × 16 gal/day, 

10 shuttle vans × 20 gal/day, or

30 taxis × 7 gal/day

2,000 gal 

storage with 

twin 1,000-gal 

tanks

1 dual-hose 

dispenser

200–800 gal

(If tank is filled 

every 2 weeks to 

2 times/wk)

Purchasing New 

Equipment: 

$60,000–$70,000

Initial Cost for Leasing:

$5,000–$12,000

20 school buses × 15 gal/day

30 shuttle vans × 18 gal/day

60 taxis × 7 gal/day, 

65 delivery vans × 6 gal/day, or
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Medium Stations

Station Design Approx. Daily Fuel 

Use*

Cost Range Example Applications*

12,000-gal 

storage tank

2 dual-hose 

dispensers

450–1,800 gal

(If tank is filled 

with 1–3 transport 

loads/mo)

Purchasing New 

Equipment: 

$120,000–$145,000

Initial Cost for 

Leasing:

$15,000–$50,000

35 school buses × 14 gal/day, 

65 police cruisers × 7 gal/day, or

100 shuttle vans × 20 gal/day

18,000-gal 

storage tank

3 dual-hose 

dispensers

900–2,400 gal

(If tank is filled 

with 2–4 transport 

loads/mo)

Purchasing New 

Equipment: 

$150,000–$220,000

Initial Cost for 

Leasing:

$15,000–$50,000

60 school buses × 16 gal/day, 

70 shuttle vans × 20 gal/day, 

100 school buses × 10 gal/day, or

150 taxis × 10 gal/day

Large Stations

Station 

Design

Approx. Daily 

Fuel Use*

Cost Range Example Applications*

30,000-gal 

storage tank

4 dual-hose 

dispensers

900–3,000 gal

(If tank is filled 

with 2–5

transport 

loads/mo)

Purchasing New 

Equipment: 

$225,000–$300,000

Initial Cost for Leasing:

$15,000–$50,000

70 shuttle vans × 20 gal/day, 

100 delivery vans × 9 gal/day, or

250 school buses× 10 gal/day

*Daily fuel use and fleet sizes for each tank size can vary substantially.

Propane station adjacent to a gasoline station in Phoenix, Arizona. Photo by Gabe R. DeWitt, NREL 30248
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Additional Resources

For more information about propane stations, visit the Alternative Fuel Data Center at

afdc.energy.gov/fuels/propane_infrastructure.html. To learn more about the topics introduced in 

this document, connect with your local Clean Cities coalition. Coalition contact information can 

be found at afdc.energy.gov/cleancities/coalitions/coalition_contacts.php.

Questions or comments about the information in this document can be sent to 

cleancities@nrel.gov.

Front Cover Pictures Credits: 

MotorWeek/Maryland Public TV, NREL 17166

Gabe R. DeWitt, NREL 30341

MotorWeek/Maryland Public TV, NREL 17176
VEHICLE TECHNOLOGIES OFFICE

Clean Cities Technical Response Service

800-254-6735 • technicalresponse@icfi.com

DOE/GO-102014-4469 • August 2014